Real Property Flashcards
What is the possibility of reverter?
The possibility of reverter is a future interest held by a grantor or transferor of property as a fee simple determinable. Despite its name, it automatically vests once the stated event occurs.
What is a right of entry?
A future interest held by the grantor following a fee simple subject to condition subsequent. It DOES NOT vest automatically; it must be reclaimed
What is the right of entry also known as?
the power of termination
What is the key aspect of fee simple determinable? What are some common terms?
durational language (e.g., [SUD language “so long as,” “until,” “while,” “during” ).
What is the future interest created in a fee simple determinable?
possibility of reverter
What is the key aspect of fee simple subject to condition subsequent? What are some common terms?
conditional language
[BOP language]
but if, on condition that, provided that
What is the future interest created in a fee simple subject to condition subsequent?
right of entry
What is a life estate that is measured by someone besides the grantee?
life estate pur autre vie
If possession of the land goes back to the grantor after the life estate ends, what does the grantor have?
reversion
If possession of the land goes to a third party (transferee) after the life estate ends, then what does the third party have
a remainder
What is a vested remainder?
a future interest that is
1) given to an ascertained grantee and
2) not subject to condition precedent
What happens if the requirements of a vested remainder are not met?
then it is a contingent remainder
What is the rule in Shelley’s case?
Shelley’s heirs
If the grantor tried to convey a future interest to the heirs of the grantee, the interest is considered to be to the grantee and not in the heirs of the grantee.
What is the doctrine of worthier titles?
[I am worthier than my heirs]
A doctrine creating a presumption that when a grantor conveys a future interest to the grantor’s own heirs, the grantor actually intended to keep the interest in himself or herself. May be overcome with sufficient evidence of a contrary intent.
Who does a springing executory interest divest?
the grantor; typically when there are 2 parties
Think “spring back”
Who does a shifting executory interest divest?
the grantee; typically when there are 3 parties
Think “shift to someone else”
What are the three future interests RAP applies to?
contingent remainders, executory interests, class gifts (subject to open) if not closed by rule of convenience
What is the default concurrent interest?
tenancy in common
What is the defining characteristic of a joint tenancy?
the right of survivorship
+If jointly owned property is devised, it does not break the joint tenancy. Upon death, the property will go to the survivor.
What are the four unities of joint tenancy?
[PITT] possession, interest, time, title
Also the express right of survivorship
What is ouster?
when one co-tenant in possession denies another co-tenant access to the property
What is the majority rule regarding a landlord’s ability to require permission to transfer?
A landlord may deny permission to transfer only for a commercially reasonable reason.
What are the requirements for adverse possession?
ANOCHE 1) actual + 2) notorious + 2) open + 3) continuous 4) hostile 5) exclusive \+ = these three are typically grouped together
What is a mortgage?
a security device used to secure payment of a debt
Who is the mortgagor and the mortgagee?
the mortgagor is the borrower and the mortgagee is the lender
What is the “estoppel by deed” doctrine?
a grantor who conveys an interest in land by warranty deed before actually owning it is estopped from later denying the effectiveness of that deed
Who can enforce an equitable servitude?
The benefit of enforcing an equitable servitude is held only by the original parties and their successors in interest.
What is the doctrine of equitable conversion?
In a majority of jurisdictions, the doctrine of equitable conversion applies when a land-sale contract is silent regarding the risk of loss. Under this doctrine, the risk of loss is placed on the party with equitable title at the time the property was destroyed unless the other party is at fault for the loss. The seller retains legal title to real property during the pendency of the sales contract (i.e., during the executory period), but the buyer receives equitable title once the contract is formed and can be specifically enforced.
What happens when a buyer takes a property “subject to the mortgage”?
the buyer does not agree to pay and is not personally liable for the debt
What happens when a buyer takes a property and “assumes the mortgage”
the lender may seek payment from both the original debtor and the buyer for payment of the debt
How does a debtor regain clear title to a property through the equitable right of redemption?
by paying the amount currently owed on the loan plus any accrued interest before the foreclosure sale
What is the life tenant’s obligation to pay ordinary taxes on the real property?
Only when the life tenant receives a financial benefit from the property. But the life tenant only has to pay taxes when they are less than the financial benefit
What is the guarantee made by the grantor in a quitclaim deed?
the grantor transfers whatever rights he has in the property to the buyer
To obtain a zoning variance, what must the property owner show?
UH Circumstances Created Pharell Williams
1) compliance with the zoning ordinance would result in an unnecessary hardship;
2) the hardship comes from circumstances that are unique to the property;
3) the hardship was not created by the owner
4) it would be in keeping with the overall purpose of the ordinance; and
5) it would not result in substantial harm to the general welfare
What must a plaintiff show to establish a violation of the 14th Amendment’s Equal Protection Clause?
A plaintiff must prove racial intent or purpose in order to establish a violation of the Fourteenth Amendment’s Equal Protection Clause
What must a plaintiff show to establish racial discrimination under the Fair Housing Act?
The plaintiff needs to show a disparate racial impact.
A tenant is considered a holdover tenant when he continues to occupy the premises without the landlord’s consent and after the expiration of the lease. What two remedies does a landlord have?
The landlord may:
- evict
- bind the holdover tenant to a new periodic tenancy.
What are the three requirements of a valid deed transfer of title?
[IDA]
intent, delivery, acceptance
+Once these requirements are met, the transfer cannot be canceled (e.g., by destroying the deed or returning it to the grantor)
+delivery is ineffective if it is contingent upon a future event (e.g., the death of the grantor)
Who bears the risk of loss if real property is destroyed between execution of a land-sale contract and closing?
In most states, the buyer bears the risk of loss (regardless of whether the buyer takes possession of the property), except when the loss is due to seller’s intentional or negligent actions (then seller bears risk).
What is a wild deed?
A wild deed is a recorded and indexed deed, but not in the correct way to give subsequent purchasers constructive (record) notice. Even if the owner of a wild deed recorded first, they will likely not succeed under any of the three types of recording acts because the subsequent recorder could not have found the wild deed.
What is a purchase money mortgage?
A mortgage that is used for the purpose of purchasing property
+Has “super priority” over all other liens
What is a future advance mortgage?
A “second mortgage,” used for home equity, construction, business, or commercial loans
[remember fam because this mortgage is used to help your family who already own a home]
What protections does a buyer have with an option contract?
During the time specified in the contract, the buyer is protected against revocation and termination (if the grantor of the option dies or becomes incapacitated).
What is an assignment?
An assignment is a complete transfer of all of the tenant’s remaining lease term
[remember A for ALL rights, unlike S for Some rights in a sublease]
After a mortgaged property is sold at a foreclosure sale, in what order are the proceeds distributed to different stakeholders?
1) costs related to the sale
2) the party who foreclosed on the property
3) any junior interests, in order of their priority
4) the mortgagor receives any remaining money
If one co-tenant rents out the property, how must profits be split among all co-tenants?
rent is divided based on ownership interest of each tenant.
Name four real property instruments that must comply with the Statute of Frauds (aside from a land sales contract).
- Promise to create an interest in real property
- Assignment of a right to purchase
- Option contract
- Promise to give a mortgage or other lien security
What are the four exceptions to the Statute of Frauds writing requirement?
- Partial performance
- Full performance
- Detrimental reliance
- Admission
What is the warranty of marketable title?
The warranty of marketable title is implied in all real estate contracts. This guarantees that, upon closing, the seller will convey the buyer title that is free from defects (such as undisclosed easements, future interests) regardless of the type of deed.
What are the four types of landlord-tenant estates?
[SPWY]
- Tenancy at sufferance
- Periodic tenancy
- Tenancy at will
- Tenancy for years
What are the prerequisites for creating an easement by necessity?
1) the estates must have been under common ownership in the past
2) the easement is absolutely necessary for the use and enjoyment of the land (e.g., the dominant tract is landlocked and has no access to a public road)
What kind of tenants have the right to unilaterally partition a piece of property?
A tenant in common or a joint tenant may unilaterally partition property
+While a joint tenant can sever their interest unilaterally, they cannot devise their interest through will.
What happens when an attempt to create an easement fails due to the Statute of Frauds?
A license results when there is a failed attempt to create an easement
Regarding the effect of a mortgage on a JOINT TENANCY, what is the difference between a title theory jurisdiction and a lien theory jurisdiction, and which is the majority rule?
Lien theory states (the majority): no severance- the mortgage is only a lien on the property
Title theory states (the minority): severance- the joint tenancy is converted into a tenancy in common with respect to the mortgaging tenant
For both theories, the joint tenancy is severed if the mortgage is actually foreclosed
What was the common law Rule Against Perpetuities (RAP) designed to do?
RAP was designed to prevent interests from being created in the too distant future
What is a retaliatory eviction?
A retaliatory eviction is the unlawful eviction of a residential tenant by a landlord in response to the tenant complaining, in good faith and with reasonable cause, about a housing, building, or safety code violations. This applies to a landlord retaliating by refusing to renew a periodic tenancy.
What is a landowner’s liability if he excavates on his land and causes the adjacent, undeveloped land to collapse or subside?
The excavating land owner is strictly liable.
When reading a question involving future interests, when are you safe from having to consider the Rule Against Perpetuities (RAP)?
RAP is not an issue when analyzing future interests that revert to the grantor (i.e., reversion, possibility of reverter, right of reentry).
What are the three requirements in a land sale contract to satisfy the Statute of Frauds?
SEW
1) Signed by the party to be charged
2) contain all Essential terms (describe the land & state some consideration)
3) in Writing
Restrictions on the transferability of property (restraints on alienation) are generally prohibited. However, what two restraints on alienation can be valid on a life estate?
- Forfeiture restraint (property forfeited if interest owner attempts to transfer)
- Promissory restraint (promise by interest holder not to transfer) can be valid on a life estate.
What are the requirements of a valid deed?
Will Grants Interest When Proper
- Writing
- Grantor’s signature
- Identities of the grantor and grantee
- Words of transfer
- Property description
- Consideration is not required to be a valid deed.
+The description must be reasonably definite, but extrinsic evidence is admissible to clarify any ambiguities (e.g., to resolve a discrepancy in acreage)
+a deed to a nonexistent grantee (e.g., a corporation that has not been formed) is void and the grantor will retain the property
What is a constructive eviction?
when the landlord breaches a duty to the tenant that substantially interferes with the tenant’s use and enjoyment of the leasehold. The premises must be in such disrepair that it is virtually uninhabitable
What are two major exceptions to a tenant’s duty to pay rent?
- Destruction of the premises not due to tenant’s fault, or
- Material breach of the lease by the landlord (e.g., breach of the covenant of quiet enjoyment or the implied warranty of habitability)
In the event that a mortgagor-borrower defaults, who has priority if there is a seller PMM and third party lender PMMs?
A seller’s PMM has priority over a third-party’s PMM.
Priority of third party PMMs against each other are determined chronologically (subject to applicable exceptions).
What are the six covenants of title that a grantor guarantees with a general warranty deed?
sara reads emails quietly while flying Present covenants: 1) Covenant of Seisin, 2) Covenant of the Right to convey 3) Covenant against Encumbrances
Future covenants:
4) Covenant of Quiet enjoyment
5) Covenant of Warranty
6) Covenant of Further assurances
For a constructive eviction claim to be effective (i.e., tenant no longer has to pay rent), what TWO things must a tenant do if the residential rental property is uninhabitable?
- Give notice and adequate time for the landlord to correct the problems, AND
- Vacate the property within a reasonable amount of time
What remedies does a tenant have when a landlord breaches the warranty of habitability?
If the premises are not habitable, then the tenant may choose to:
- terminate the lease and move out
- make repairs and deduct the cost from the rent
- pay reduced rent, remain on the premises, and sue for damages
- Generally, before the tenant can withhold the rent or remedy the defect, the tenant must first notify the landlord of the condition, if the landlord is unaware of it, and then give the landlord a reasonable opportunity to correct the condition
If a buyer is purchasing property using an installment land contract, when does she obtain legal title?
Buyer obtains legal title upon final payment under the installment payment plan.
What is attornment and how does it happen?
Attornment is the TENANT’s acknowledgement of a new landlord.
This can be accomplished (i) in writing, or (ii) by making rent payments to the new landlord.
What are the requirements for a burden to run with the land?
Writing Interesting New HoVa Tracks
- Writing to satisfy Statute of Frauds (exception implied reciprocal servitude)
- Intent
- Notice (required only if the person to be bound was a purchaser)
- Horizontal Privity
- Vertical Privity
- Touch and Concern
A sublessee is not liable to the landlord for rent or any other covenants in the lease unless what happens?
If the sublessee expressly assumes the rent covenant (or any other covenants), then the sublessee becomes personally liable to the landlord.
What do recording acts apply to?
Nearly all instruments affecting real property interests may be recorded, including easements, covenants, leases, contracts to convey, and mortgages.
How are easements terminated?
END CRAMP
- estoppel
- necessity ends
- destruction
- condemnation (by eminent domain)
- release in writing
- abandonment action (beyond just words or disuse)
- merger doctrine (both parcels are owned by one)
- prescription
What are the requirements for a covenant to run with the land?
WITCH VN [think coven]
1) Writing
2) Intent to run
3) Touch and Concern
4) Horizontal Privity—only required for burden to run
5) Vertical Privity
6) Notice—only required for burden to run
What are the requirements for an equitable servitude to run with the land?
[What In The Name?]
1) Writing
2) Intent
3) Touch and Concern
4) Notice—only required for burden to run
What is a deed of trust?
a writing granting an interest in property as security for an obligation, but the deed goes to a third party as trustee
What does it mean for a covenant to touch and concern the land?
it must relate to the use, enjoyment, or occupation of the dominant and servient estates; an economic benefit would not be enough
When can termination rights in an at-will tenancy be limited?
they are generally ok except when they are unconscionable
What is the difference in liability when the improved land is damaged due to subjacent support?
If the adjacent land subsiding would have occurred in the natural state, then strict liability applies
If the damage would not have occurred in the natural state, then negligence applies.
What is the common law exoneration-of-liens doctrine?
the recipient of a specific devise of real property can use the remaining assets in the testator’s estate to pay off any encumbrances on that property. Most states have abolished this doctrine, and payment of an encumbrance on devised real property is required only if the will so specifies.
What is the doctrine of ademption by extinction?
when the testator does not own a specifically devised asset at the time of death. the device of real property will fail.
In a title-theory state, what does the lender have when they hold a mortgage?
legal title to the mortgaged land and can take possession of the land even if the mortgagor is not in default
Can a buyer who assumes a mortgage as part of the purchase price later raise the defenses that the debtor could have raised to avoid the mortgage obligation?
No. A buyer who assumed a mortgage as part of the purchase price may not raise defenses. Otherwise, the buyer would be unjustly enriched.
When can an equitable servitude be implied from a common scheme?
(1) the owner intended to create a common scheme,
(2) the intended servitude was restrictive, and
(3) persons to be bound had notice of the servitude.
But it cannot be enforced against lots sold before the common scheme arose.
What happens when the lender waives a “due on sale clause” when the debtor transfers the mortgaged property?
The lender may waive this clause, but the debtor is still liable on the note unless the lender releases the debtor from that obligation. Even if the buyer assumes the mortgage, the original debtor becomes secondarily liability as a surety. This gives the lender the right to sue either party upon default, and the original debtor can recover any amount paid from the grantee.
What makes something a material physical defect?
Substantially impacts the:
- Value
- Health or Safety
- Desirability to the buyer
Ex: not disclosing a murder on the property may be a material defect
In a majority of jurisdictions, what duty does the seller of real property have?
A duty to disclose all known, material physical defects that cannot be reasonably discovered by the buyer
The seller can disclaim this duty if:
- the disclaimer is clearly and specifically stated in the real estate contract AND
- the seller has not fraudulently misrepresented or concealed the condition of the property
What is the doctrine of equitable conversion?
Once there is a sale contract for real property, the buyer gets equitable title (becomes the owner) and the seller retains legal title. If the property is destroyed (through no fault of the parties) prior to closing, the buyer bears the loss
What happens when there is a judgment obtained against the seller after the execution of the land-sale contract
the judgment is not enforceable against the real property—even if the claim arose before the contract was executed.
What happens when there is (1) a “time is of the essence” clause, (2) circumstances indicated that the parties intended to strictly adhere to the closing date, or (3) one party notifies the other that time is of the essence within a reasonable time prior to closing
A seller must deliver marketable title on the CLOSING date
The grantor typically manifests the intent to presently transfer the property by physically handing over or mailing the deed to the grantee or the grantee’s agent. However, the intent to transfer can also be implied from the grantor’s words or other conduct. What’s an example?
A farmer signed and notarized the deed and then started to deliver it to the friend before stopping for lunch.
What happens when a property has a defect yet the buyer still wants the property, but the seller refuses to perform?
the buyer can (1) rescind the contract and seek restitution, (2) seek specific performance with an abatement of the purchase price, or (3) sue for damages.
What is the doctrine of subrogation?
a third party (subrogee) who fully pays another’s mortgage loan becomes the owner of the loan and the mortgage. The subrogee may therefore seek reimbursement from the debtor or enforce the mortgage.
+The third party MUST lack actual knowledge of junior interests
What type of notice is needed to end a periodic tenancy?
Under the common law, oral notice of termination is sufficient. However, under modern statutes, most states require written notice
What are the duties of the landlord?
Repairing Quietly Gives Hobby
1) duty to Repair
2) covenant of Quiet enjoyment
3) Give possession
4) warranty of Habitability
What is the covenant of quiet enjoyment?
The covenant of quiet enjoyment is a promise by the landlord not to interfere with the tenant’s possession of the leased premises
After a constructive eviction, what can the tenant do?
the tenant’s obligation to pay rent is excused due to constructive eviction only if the tenant gives notice and adequate time to permit the landlord to fulfill his duty and vacates the property within a reasonable amount of time.
What are low-level interferences with the use and enjoyment of the premises called?
de minimis acts, which do not generally constitute constructive eviction
What is the duty to repair?
Under the common law, there was no implied duty on the part of the landlord to repair leased premises. However, the majority of jurisdictions today enforce an implied duty upon the landlord to repair under a residential lease except for damages caused by the tenant. Failure to make these repairs may constitute a constructive eviction or violate the implied warranty of habitability.
When does a landlord have a duty to repair a commercial lease?
courts are reluctant to imply a landlord’s duty to repair in commercial leases because the implied warranty of habitability does not apply in commercial leases. Therefore, absent some statutory or contractual obligation, a landlord only has a duty to make a repair if (i) the repair is so substantial that it would not ordinarily fall within the tenant’s common law repair duty, or (ii) the value of the repair would primarily inure to the landlord’s reversionary interest.
Ex: a pipe in the bathroom leaked causing flooding in a nail salon. The manicurist took reasonable steps to mitigate damages by cleaning the floor and turning off the leaking pipe. The salon was able to operate, but not at full capacity. The LL still has no duty to repair the plumbing.
What is a condition that violates the warranty of habitability?
A condition that substantially threatens a tenant’s health or safety. A failure to comply with the housing code does not automatically constitute a breach, but may serve as evidence of a breach
What are the majority and minority rules regarding preventing assignment or subletting without the permission of the landlord, and the lease is silent as to a standard for exercising that permission?
majority: the landlord may withhold permission only on a reasonable ground in relationship to the property being leased and not on a whim or personal prejudice
minority/traditional: the landlord may withhold permission at his discretion.
What is vertical privity?
the successors acquired, by purchase or other means, the same ownership interests as the original parties
Could also be a Landlord-Tenant relationship
What is horizontal privity?
promising parties simultaneously transfer the land and create the covenant
What does it mean to touch and concern the land
the covenant relates to the use, enjoyment, or occupation of the land
What does it mean to have notice, for purposes of analyzing a real covenant that runs with the land?
person to be bound had actual, inquiry, record [AIR] notice of the covenant
Though an outstanding mortgage is a title defect, the seller can apply the proceeds from the sale of the property to the mortgage obligation. Doing so will eliminate this title defect if the sale proceeds exceed the amount of the outstanding mortgage.
o
When mortgaged property is transferred to a donee, the donee may assert the donor-mortgagor’s defenses against the mortgagee-lender. But a purchaser who assumes an existing mortgage obligation as part of the purchase price may not do so.
o
